Insurance Mandate

In most countries, if not all, the ruling government demands – by use of the country’s legal system - that all drivers have insurance coverage, which at minimum (third party insurance) should be enough to cover the damage you (through your car) inflict on others.

On the face of it this seems like a reasonable system, but is it?

I, and you, may feel much safer driving our “tens of thousands dollar car” knowing that this asset is protected from all those other road-using-idiots. Unfortunately, with the experience from, my fifty-three years of existence and thirty-five years of driving, who I really need protection from is the Insurance Companies and their monopolistic control of the motor insurance industry. An industry that our legal system has allowed to run roughshod over all drivers-rights.

All governments should be guided by one underlying principle, to protect the rights of the individual while maintaining the goals of the society as a whole. And I agree with the policy of the mandatory driving insurance system, but I think that all governments have dropped the ball by allowing a law that allows one small segment of the business community to take advantage of a larger segment of the population.

This becomes even more disadvantages in small territories, where the market size further promotes monopolies through either the number of companies available to offer a service and/or collusion.

I will not bother to site examples of unrealistically high insurance rates charged by these companies nor site further examples of how these companies have also immorally, and in some cases illegally, wiggled out of claim payments, since I am positive that each of us has a personal experience or knows someone who has personal experience of this.

What I would like to offer is an alternative.

I agree that each vehicle user must be protected from every other road user, our road system, is after all, a shared asset that benefits each individual as well as our society as a whole. What we need is a better way to effect this protection, not only to each user, but also to limit it to when it is actually needed, that is when we are driving and not when the car is parked in our garage.

Remember, what I am talking about here is insuring the other road user (which you will always belong too since you are always the other road user to someone else) and not insuring your property, which in this case is your car. This you can do separately to protect it from damage inflected by you (such as car repairs from driving in into your garage door) or Acts of God (such as tress falling our your car).

No what I’m talking about is covering the damage you inflict on the other roads users, more commonly called third party insurance, and in most cases is the minimum insurance coverage the road users’ law requires you have.

I am suggesting that the government use its vast sea of data collected from the many years we have all been driving to determine the average annual payout of claims, due to third party road-going accidents, and use this to determine an appropriate fund to cover future road users.

Then apportion a fee, based on road usage, to each driver. This fee can be collected through a number of systems, annual fees much like the permits we pay for the car, toll systems on the roads, mandatory annual safety checks, etc. Each have their pros and cons, but what I would like to suggest, as the most efficient way, is through the gas station.

Every vehicle needs fuel to allow it to use the roads and in fact can only use the roads through the use of gas, so a fee attached to these prices will allow all roads users to travel with the required insurance.
The advantage of this system is that we pay insurance only when we “use the road” and not on the individual car. So if you drive more than me then you pay more than me, or if you drive less than me then you pay less than me.

You pay for usage and not for a car holed up in your garage for most of the year, you do not pay per car you own (as you do now) but for when you use the car, which is when the insurance is really needed.

All drivers will be covered, whether that driver is local or from out-of-country, or state, or town. Once you buy gas you are covered.

Not to mention reducing the high occurrence of non-insured drivers that presently use the road today. In Florida one in four drivers are un-insured; in Mississippi it is 28%; in Tennessee 24% and one in six drivers on the LA Freeway is un-insured. (from the National Insurance of Insurance Commissioners)

Of course nay-sayers will immediately baulk at this notion, siting increased government control of our lives and unnecessary red-tape, but really isn’t the mandatory insurance already a fact of road-life (and a control over our actions) and isn’t the Police stop where they ask for proof of insurance and supplying proof of insurance to annually re-permit your car already red-tape?

Plus we already have government fees/taxes being collected by businesses from us on behalf of the government in federal taxes, sales taxes and VAT (value added taxes).

Yes, there is one small negative to this system, as I see it. We are presently looking into alternate energy sources and have to apply this system to these alternate systems but at this stage in the game they are such a small segment of the total market that their impact can be easily calculated into the fee. The advantage though, at this time, as far as I am concerned, far outweighs the dis-advantage. We can stop the unethical legalizing of a business system that controls our road-user needs and whose only objective is generating a profit (and a fat one at that) at the detriment of  the individual’s rights.